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Short-Form Announcement: Unaudited Interim Results And Dividend Declaration For The Six Months Ended 31 August 2020
SPEAR REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2015/407237/06)
Share code: SEA
ISIN: ZAE000228995
Approved as a REIT by the JSE
(“Spear” or “the Company”)
SHORT-FORM ANNOUNCEMENT: UNAUDITED INTERIM RESULTS AND DIVIDEND
DECLARATION FOR THE SIX MONTHS ENDED 31 AUGUST 2020
1. SALIENT FEATURES
Distributions per share decreased by 34.27% to 29.34 cents per share (based on a 80%
pay-out ratio), from 44.64 cents per share in the prior corresponding period (based on a
100% pay-out ratio).
Interim collection of 96.90% vs billings as measured at 15 October 2020.
Year to date collections to October 2020 of 94.03% vs billings as measured at 15 October
2020.
Management has successfully renewed/re-let 101 125m2 at a negative reversion of
1.90%.
Net asset value per share increased by 1.04% to 1179 cents per share, from 1167 cents
per share in the prior corresponding period.
Portfolio occupancy rate of 91.20% and 100% Western Cape based.
Investment property value increased 13.76% to R4.46 billion, from R3.92 billion in the
prior corresponding period.
Loan-to-Value increased by 5.73% to 45.36%, from 39.63% reported as at 29 February
2020.
Revenue increased by 1.19% to R254 million, from R251 million in the prior corresponding
period.
Headline earnings per share decreased by 13.79% to 39.20 cents per share, from 45.47
cents per share in the prior corresponding period.
A loss of 0.58 cents per share were reported for the current period, compared to the
earnings of 14.51 cents per share in the prior corresponding period.
2. DIVIDEND WITH ELECTION TO REINVEST
The directors resolved to declare an interim gross dividend of 29.34465 cents per share
from income reserves, in respect of the six months ending 31 August 2020, payable to
shareholders registered as such at the close of business on Friday, 20 November 2020
(“Record Date”).
Shareholders will be entitled to elect to reinvest the cash dividend, in return for Spear
ordinary shares (“Shares”) (”Dividend Reinvestment Alternative”), failing which, they
will receive the cash dividend (“Cash Dividend”). Further details regarding the Dividend
Reinvestment Alternative will be set out in a circular to shareholders, to be issued on 3
November 2020.
The entitlement of shareholders to elect to participate in the Dividend Reinvestment
Alternative is subject to the board having the discretion to withdraw the entitlement to elect
the Dividend Reinvestment Alternative should market conditions warrant such action. A
withdrawal of the entitlement to elect the Dividend Reinvestment Alternative would be
communicated to Shareholders before the publication of the finalisation announcement
on Friday, 6 November 2020.
By electing the Dividend Reinvestment Alternative, Shareholders will be able to increase
their shareholding in Spear without incurring dealing costs. In turn, and in line with Spear's
stated strategy to reduce its LTV, the reinvested funds will be deployed to reduce existing
debt.
Please see below the salient dates and times relating to the Cash Dividend and Dividend
Reinvestment Alternative:
The salient dates and times: 2020
Record date to determine which shareholders are entitled to
receive the circular (“Circular”) Friday, 23 October
Declaration date Friday, 30 October
Circular and form of election posted to shareholders Tuesday, 3 November
Finalisation announcement containing the Dividend Reinvestment
Alternative issue price, ratio and finalisation information on SENS Friday, 6 November
Last day to trade cum Dividend Reinvestment Alternative and
Cash Dividend (“LDT”) Tuesday, 17 November
Trading commences ex Dividend Reinvestment Alternative and
Cash Dividend Wednesday, 18 November
Listing of maximum possible number of Shares to be issued
under the Dividend Reinvestment Alternative Friday, 20 November
Last day to elect to receive the Dividend Reinvestment Alternative
by 12:00pm (South African time) on Friday, 20 November
Record Date Friday, 20 November
Electronic payment and CSDP/broker accounts updated in
respect of Cash Dividend and cash dividend cheques posted to
certificated Shareholders on Monday, 23 November
Announcement of the results of the Dividend Reinvestment
Alternative and Cash Dividend on SENS Monday, 23 November
Share certificates posted and CSDP/broker accounts updated in
respect of Dividend Reinvestment Alternative on Wednesday, 25 November
Adjustment of number of new Shares listed on or about Friday, 27 November
Notes:
1. Shareholders electing the Dividend Reinvestment Alternative should note that
settlement of the Shares will occur three business days after the record date,
which differs from the conventional one business day after the record date
settlement process.
2. Share certificates may not be dematerialised or rematerialised between
Wednesday, 18 November 2020 and Friday, 20 November 2020, both days
inclusive.
3. The above dates and times are subject to change. Any changes will be
announced on SENS.
4. All times quoted in the Circular are South African times.
Tax implications
In accordance with Spear’s status as a Real Estate Investment Trust (“REIT”),
shareholders are advised that the dividend meets the requirements of a “qualifying
distribution” for the purposes of section 25BB of the Income Tax Act, No. 58 of 1962, as
amended (“Income Tax Act”).
South African tax residents
Qualifying distributions received by shareholders who are South African tax residents
must be included in the gross income of such shareholders (as a non-exempt dividend in
terms of section 10(1)(k)(aa) of the Income Tax Act), with the effect that the qualifying
distribution is taxable as income in the hands of the shareholder. These qualifying
distributions are, however, exempt from dividend withholding tax ("DWT") in the hands of
South African tax resident shareholders, provided that the South African resident
shareholders have provided the following forms to their Central Securities Depository
Participant (“CSDP”) or broker, as the case may be, in respect of uncertificated Shares,
or to Spear’s transfer secretaries (“Transfer Secretaries”), in respect of certificated
Shares:
• a declaration that the distribution is exempt from DWT; and
• a written undertaking to inform the CSDP, broker or the Transfer Secretaries, as
the case may be, should the distribution cease to be exempt from DWT,
both in the form prescribed by the Commissioner for the South African Revenue Service
("SARS") and shareholders are accordingly advised to contact their CSDP or broker or
the Transfer Secretaries, as the case may be, to arrange for the abovementioned
documents to be submitted prior to payment of the distribution, if such documents have
not already been submitted.
Non-residents shareholders
Qualifying distributions received by non-resident shareholders will not be taxable as
income and will instead be treated as ordinary dividends but which are exempt in terms
of the usual dividend exemptions per section 10(1)(k) of the Income Tax Act. Any
qualifying distribution received by a non-resident from a REIT will be subject to DWT at a
rate of 20%, unless the rate is reduced in terms of any applicable agreement for the
avoidance of double taxation (“DTA”) between South Africa and the country of residence
of the shareholder. Assuming DWT will be withheld at a rate of 20%, the net amount due
to non-resident shareholders will be 23.47572 cents per Share. A reduced DWT rate in
terms of the applicable DTA, may only be relied on if the non-resident shareholder has
provided the following forms to their CSDP or broker, as the case may be, in respect of
the uncertificated Shares, or to the Transfer Secretaries, in respect of certificated Shares:
• a declaration that the dividend is subject to a reduced rate as a result of the
application of a DTA; and
• a written undertaking to inform their CSDP, broker or the Transfer Secretaries, as
the case may be, should the circumstances affecting the reduced rate change or
the beneficial owner ceases to be the beneficial owner,
both in the form prescribed by SARS. Non-resident shareholders are advised to contact
their CSDP or broker or the Transfer Secretaries, as the case may be, to arrange for the
abovementioned documents to be submitted prior to payment of the distribution if such
documents have not already been submitted, if applicable.
Non-resident shareholders are advised to contact their CSDP, broker or company to
arrange for the above-mentioned documents to be submitted prior to payment of the
dividend, if such documents have not already been submitted.
Holders of uncertificated shares have to ensure that they have verified their residence
status with their CSDP or broker. Holders of certificated shares will be asked to complete
a declaration to the company.
Further information
Fractions
Trading in the electronic Strate environment does not permit fractions and fractional
entitlements in respect of Shares. Accordingly, should a shareholder’s reinvestment in
new Shares, calculated in accordance with the ratio to be announced in the finalisation
announcement, give rise to a fraction of a new Share, such fraction will be rounded down
to the nearest whole number, resulting in the allocation of whole Shares and a payment
to the shareholder in respect of the remaining cash amount due to that shareholder under
the dividend. Certificated shareholders whose bank account details are not held by the
Transfer Secretaries, are requested to provide such details to the Transfer Secretaries to
enable payment of the fraction due to the shareholder in respect of the Dividend
Reinvestment Alternative. Should no details be on record, the funds will be held by the
Company until such time as the details have been provided and the cash fraction will be
paid to the shareholder upon its request.
Foreign shareholders
The distribution of the Circular and/or accompanying documents and the right to elect the
Dividend Reinvestment Alternative in jurisdictions other than south Africa may be
restricted by law and a failure to comply with any of these restrictions may constitute a
violation of the securities laws of any such jurisdictions. The Shares have not been and
will not be registered for the purposes of the election under the securities laws of the
united Kingdom, European Economic Area or EEA, Canada, United States of America,
Japan or Australia and accordingly are not being offered, sold, taken-up, re-sold or
delivered directly or indirectly to recipients with registered addresses in such jurisdictions.
The number of ordinary shares in issue at the declaration date is 205 776 521 and the
income tax number of the Company is 9068437236.
3. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors of the Company. It
contains only a summary of the information in the full announcement (“Full
Announcement”) and does not contain full or complete details. The Full Announcement
can be found at:
https://senspdf.jse.co.za/documents/2020/JSE/ISSE/SEAE/SEAHY21.pdf
Copies of the Full Announcement is also available for viewing on the Company’s website
at https://spearprop.co.za/pdf/investor-relations/spear-interim-results-august-2020.pdf. In
addition, electronic copies of the Full Announcement may be requested and obtained, at
no charge, from the Company at info@spearprop.co.za and from PSG Capital.
Any investment decisions by investors and/or shareholders should be based on
consideration of the Full Announcement, as a whole.
The Company has based this short-form on the financial results for the six months ended
31 August 2020 which have not been reviewed by the Company’s auditors.
4. RESULTS PRESENTATION
Shareholders are invited to view Spear’s interim results presentation to be broadcasted
on YouTube at 11h00 SAST on Friday, 30 October 2020.
Presentation details:
- View and listen mode;
- Link: https://youtu.be/MbyFC3EcPJU;
- Presentation slides will be made available on Spear's website shortly before the
broadcast of the presentation under investor relations / financial results /
presentations, at the following link: https://spearprop.co.za/investor-relations/
- Questions may be e-mailed during the presentation to: info@spearprop.co.za
30 October 2020
Sponsor
PSG Capital
Date: 30-10-2020 07:05:00
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